1. Canada’s National Greenhouse Gas Inventory Presentation to the Oslo Group February 2009 Frank Neitzert, P. Eng Chief, Energy Section Greenhouse Gas Division Environment Canada

2. Page 2 – October 7, 2015 Outline National Greenhouse Gas Inventory Canada’s Reporting Obligations –UNFCCC Monitoring, Reporting and Review –Kyoto Protocol Requirements –Key Reporting and Review Principles Energy Sector –Greenhouse Gas Contribution –Emission Development ▪Stationary Combustion ▪Data Partner –Improvement Activities –Emission Trends

3. Page 3 – October 7, 2015 National Greenhouse Gas Inventory Government of Canada’s policy is to comply with international reporting obligations and support the development of quality inventories Reporting to United Nations Framework Convention on Climate Change (UNFCCC) for close to two decades National Greenhouse Gas Inventory (consists of the national inventory report and the common reporting formation tables) –Provides a complete national picture of greenhouse gas emissions and removals for a variety of government and public interest purposes Inventory improvement activities are conducted annually to reduce uncertainties associated with the estimates based on industry studies, emission factor research, provincial collaborations, QA/AC procedures, peer reviews and key category identification. Institutional Arrangements are a Pillar for Data Collection and Quality Assurance

4. Page 4 – October 7, 2015 Canada’s GHG Reporting Obligations Canada’s National Inventory must be comprehensive, accurate and verifiable, and must enable reconstruction of estimates from all sources and sinks. National Inventory serves a dual purpose and must meet requirements of both UNFCCC & Kyoto Obligation to use as detailed and up-to-date information as practical to ensure accurate and meaningful estimates –“As part of its inventory planning, each Party included in Annex I should consider ways to improve the quality of activity data, emission factors, methods and other relevant technical elements of inventories.” FCCC/KP/CMP//2005/8/Add.3 Decision 19 CMP.1

5. Page 5 – October 7, 2015 UNFCCC Monitoring, Reporting & Review Methods –Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories (IPCC 1996) –IPCC Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (2000 & 2003 for LULUCF) Reporting –UNFCCC Reporting Guidelines on annual greenhouse gas inventories (Decision 18/CP.8 & Decision 13/CP.9, 14CP.11) Review –UNFCCC Review Guidelines (Decision 19/CP.8 annex and Decision 12/CP.9)

6. Page 6 – October 7, 2015 Kyoto Protocol Requirements National System requires additional information under the Kyoto Protocol in accordance with Articles 5, and 7 of the Protocol By January 1, 2007, need to meet international guidelines related to : The National System (Article 5.1) - the institutional, legal and procedural arrangements necessary to estimate, verify and report emissions and removals of greenhouse gases The National Registry (Article 7.4) – the electronic database to account for transaction of Kyoto units The Annual Inventory Report – (Article 7.1) the reporting of all information required to assess compliance with the target Compliance with these guidelines is mandatory to: establish an emissions allowance (initial assigned amount) participate in the Kyoto Mechanisms Avoid a third-party “adjustment” to our emissions estimate

7. Page 7 – October 7, 2015 Key Reporting and Review Principles Transparency ▪Assumptions & methodologies clear Consistency ▪All inventory years internally consistent – data/methods Comparability ▪IPCC methods and UNFCCC reporting guidelines used Completeness ▪All sources/sinks, gases, years included Accuracy ▪Promoted via Good Practice Guidance ▪(QA/QC, Key category identification, uncertainty analysis and formalized institutional arrangements)

8. Page 8 – October 7, 2015 Overall Goal - Improving Inventory Quality National GHG Inventories should be: Accurate in the sense that they are neither over- nor underestimated as far as can be judged, Precise in the sense that uncertainties in the estimates should be reduced as far as practical. Inaccurate but Precise Inaccurate & Imprecise Accurate but Imprecise Precise & Accurate

9. The Energy Sector

10. Page 10 – October 7, 2015 Greenhouse Gas Contribution In 2006, the Energy Sector accounts for about 80% (583 Mt CO 2 eq) of the national total greenhouse gas emissions (721 Mt CO 2 eq.) The energy sector includes emissions from: –Stationary Combustion = 324 Mt CO 2 eq. –Transport = 192 Mt CO 2 eq. –Fugitives = 67 Mt CO 2 eq.

11. Page 11 – October 7, 2015 Emission Development In general, emissions are developed on the basis of fuel data. Almost all fuel data is supplied by Statistics Canada, Canada’s national statistics agency There are two major emission categories in the Energy Sector: –Combustion sources ▪Electricity generation, petroleum refining, oil and natural gas industries, mining, transport, manufacturing industries, commercial and residential, forestry, agriculture, etc… –Fugitive sources ▪Intentional and un-intentional releases from fossil fuel production, processing, transportation, distribution, storage, etc…

12. Page 12 – October 7, 2015 Emissions Combustion Sources Emissions = Σ(Fuel Use x EF) category Where: EF = Emission Factor = Oxidation Factor per unit fuel Statistics Canada’s Energy Balances (RESD)

13. Page 13 – October 7, 2015 Data Partners

14. Page 14 – October 7, 2015 Energy Statistics – Strengths & Weaknesses Annual Report on Energy Supply & Demand – Key Source of Data. Strengths Captures all energy use including internally produced and consumed energy. Differentiates between fuels used for industrial processes and fuels used for electricity. Differentiates between energy products used for energy purposes and non- fuel use (e.g. natural gas and petroleum coke). Provides information for a large number of energy commodities at a fine level of detail. Weaknesses Reliance on information provided by suppliers of energy Energy consumption data for key sectors such as oil and gas More industry detail required for key sectors Alternative and emerging transportation fuels Little provincial energy consumption data

15. Page 15 – October 7, 2015 Reporting Emissions in the Common Reporting Format Emissions are reported by detailed UNFCCC Common Reporting Format (CRF) categories, whenever possible In some cases the energy data is not broken down by CRF category –E.g.: Energy data for industrial electricity production is not broken down by the industries in which it is generated –Therefore must allocate differently than in CRF RESD Category to UNFCCC Reporting Category

16. Page 16 – October 7, 2015 Continuous Improvement Activities Reliable, precise energy data is critical to accurate and transparent energy sector estimates Energy section representatives: –Work directly with Statistics Canada to review annual energy data and assist in the development of improved data surveys –Serve on interdepartmental groups to direct work, discuss issues and improvements ▪Energy Steering Committee ▪Energy Working Group Energy Balances and the Industrial Consumers of Energy survey (a key input to the Balances) are jointly supported by Environment Canada and Natural Resources Canada –This funding is obtained by means of annual updated memorandum of understanding –No long-term funding is in place for this critical energy data

17. Page 17 – October 7, 2015 Emission Trends Between 1990 and 2006 –Increasing domestic and foreign demand for oil and gas contributed to an increase of 43 Mt CO 2 eq. (34% of Canadian total) emissions in the fossil fuel industry. –Rising demand for electricity along with increasing use of fossil fuels in the generation mix drove GHG emissions up by 22 Mt CO 2 eq. (17% of Canadian total) in the electricity and heat generation sector –Emissions from the transport sector has increased by 44 Mt CO 2 eq. (34% of Canadian total) due in parts to rising use of light duty gasoline trucks and heavy duty diesel vehicles